McKinsey

March 10, 2011

Brian Solis has a Klout ranking of 78 and Klout generates this summary of his Twitter status:

Brian Solis is a Celebrity You can't get any more influential than this. People hang on your every word, and share your content like no other. You're probably famous in real life and your fans simply can't get enough.

So when this message appeared in his Twitter stream it caused a flash of reponses:

News: I've joined @charleneli @jowyang & the team at Altimeter Group http://bit.ly/dNON9b about 12 hours ago via web

The responses were mostly congratulatory, but the thinking behind the scenes, as from @axels for example, was about the forthcoming consolidation of the social media consulting industry.

The move of "social media" to "social business" and then to just "business" and therefore business strategy. That's accelerated as leaders understand the pervasive role of "social" in their cross-functional business plans.

Because of point #1 it then becomes a complicated path to execution - the gap between strategy and execution as Brian Solis says. To execute requires advice and assistance from business consultants with a wide range and depth of experience, the least of which may be "social media" per se.

Developing strategy and implementing it, in a complex organisation with breadth, depth, people, existing processes, politics, legacy, and everything else requires a well structured consistent set of methodologies and training built around those and applied consistently. These methodologies, or frameworks, are also a basis for continuous improvement - an important requirement in bigger enterprises.

As I read it, Brian Solis' move to Altimeter is to consolidate these capabilities, among others.

The new consulting firm

You can think of it as building a new "McKinsey" from the roots of social business consulting - branching up into business and strategy. Strategy consulting itself, as a standalone field, has become very difficult. McKinsey itself has extended its reach and range into more execution teams, and into operations and measuring as examplified by their JV with Nielsen NM Incite.

Therefore blending a touch of good strategic thinking capability, with execution and operational experience in social media, with good methodologies and training, and a critical mass of people able to sing to this same hymmbook, and you have the new consolidated social business group.

Why aren't the global "agencies" the natural winners in this race?

For one because agencies and "creatives" usually rebel against the "straight jackets" of methodologies and the details of complex execution. The shift is to business strategy/innovation + project managemennt/execution, not creativity + campaign.

For another reason, their scope of activity is usually firewalled to the marketing or sales group. That's a severe impediment in terms of the forthcoming shift and where the power axis for social business will lie in the enterprise. It's not bad news for agencies, their role will just continue as it is today, in essence.

Do you believe that Brian Solis' move signals a consolidation trend?

What will be the nature of the consolidated firm?

Who will be the clients who most seek these firms - the issues to solve?

July 13, 2010

In their report The path to successful new products McKinsey found that the businesses with the best product-development track records do three things better than their less-successful peers:

They create a clear sense of project goals early on;

They nurture a strong project culture in their workplace; and,

They maintain close contact with customers throughout a project's duration.

Doing these things created real advantage - "The teams in our study that embraced these tactics were 17 times as likely as the laggards to have projects come in on time, five times as likely to be on budget, and twice as likely to meet their company's return-on-investment targets".

With respect to project goals, the main finding was that clarity of scope was the main differentiator between high and low performing companies. That hardly qualifies as an insight, but it obviously requires ongoing attention in every project.

McKinsey reports that the successful innovators "kept in close contact with customers throughout the development process. More than 80 percent of the top performers said they periodically tested and validated customer preferences during the development process, compared with just 43 percent of bottom performers. They were also twice as likely as the laggards to research what, exactly, customers wanted".

Secondly it more naturally enables the opportunity, oft promoted by Axel Scultze, to bring customers right into the product development process. Right in starting from the strategy, the clarity of goals, then the development cycle, the trials, and the promotion and launch.

Doing this requires some courage, but it's success becomes a self-fulfilling prophecy as those customers become advocates. They are clearly in the process because they are potential users of the product/service, and they will therefore have their own influence and networks among similar clients. That's where WOM comes in and builds upon the success of the lifecycle engagement of such customers in the product development.

And money can't buy that, no matter how many focus groups and how much "market research" you do!!

How do you use social media to improve product development, and what's the impact?

And in particular they want sales reps with "adequate product knowledge" and "fewer, more meaningful interactions" (only 3 percent said they weren't contacted enough).

McKinsey goes on to say:

"Striking the right balance between contacting customers too much and too little requires understanding their stated and actual needs. There should be a clear strategy for reaching out to customers based on needs and profit potential, with schedules dictating frequency. The best contact calendars center around events that create value for customers, such as semiannual business reviews..."

When it comes to specifics, McKinsey found customers were "more than happy to use self-serve or online tools and selectively tap specialist support for the most complex situations".

What's this mean for social media in B2B?

We already know that the buying cycle and the selling cycle have moved completely out of sync, and in particular that buyers not only inform themselves but that they now determine their own schedule for when they want to contact a selling organisation. They also trust recommendations from independent online sources, in particular forums, more highly than from any company source.

Therefore, the customer-contact recommendation above strikes me as quaintly old-fashioned, and even out of touch with McKinsey's own assessment of the strategic role of social media for business. The recommendation is an internally-focused process with a schedule! This seems a country mile from the way customers want to be treated today, given their presence in the social media.

As an alternative I would recommend "reaching out to customers" has to be a very regular operational activity in the social media, following the usual rules of contribution and participation. The rate of contact will depend then only on the relationship building and value, and not a calendar.

Reaching out in this regular will provide many opportunities to direct customers and potential customers to online forums, and self-serve tools in a value-added way which is relevant to the moment, as indicated through the social media conversations.

McKinsey concludes their article by recommending that companies should examine exactly how they are performing by asking the following questions:

What are the most influential drivers of the sales experience?

What things are your sellers doing that could damage relationships?

How does the perception your customers have of your sales force compare to how they view your competitors?

I'd probably put it a little differently, bearing in mind the social media context and the misalignment of the buyer-seller process.

Firstly, I would ask how can continue to better use social media and digital engagement/assets to really understand the buyer's buying process?

Secondly, what are the most effective things we are doing to facilitate the buyer's buying process (and hence our relationship)?

Thirdly, what can we learn in the social media about how our customers and potential customers view their buying needs and interaction with us versus our competitors.

The exciting thing is that all this information, for many companies, is available today in the social media.

How would you advise a company to improve its B2B sales engagement using the social media?